How much does digital marketing cost?

Jake Maines is the Digital Marketing Manager at Array Digital. We help grow businesses through custom software, websites, and digital marketing.

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Before outsourcing your digital marketing, it’s important to understand the costs. The costs of digital marketing vary widely in the industry. You can outsource or hire within.

Digital marketing encompasses many different services such as search engine optimization (SEO), social media, content marketing, pay-per-click (PPC) advertising, email marketing campaigns, web design, web analytics, RSS, and much more. Each digital marketing agency or consultant offers varying combinations of these services and prices will be higher with additional services you receive.

Most digital marketing consultants and agencies use one of three common engagement models: project-based fees, monthly retainer contracts, or hourly rates. We’ve included a fourth option – employment – to ensure you know all of your options.

The below engagement models are sorted from potentially least expensive to most expensive. Keep in mind that your cost and experience will vary based on your industry, region, and specific needs.

Hourly Rates

Entrepreneur.com surveyed freelancers from 16 different countries and found they typically charge $50-$100/hour. With hourly rates every hour spent on your project is a billable hour regardless of the task performed. So answering email, time in meetings, etc, will end up on your invoice. The upside of hourly work is you only pay for what you use. The downside is that the number of hours could spin out of control if you don’t keep a watchful eye on progress.

Monthly Retainers

A monthly-retainer contract fee typically ranges between $1,000-$3,000 in the U.S. Larger agencies will offer more services for higher prices to larger clients. The SEOmoz survey also found that the most common price brackets for monthly retainer pricing range are between $251-$500/month (13.8% of total responders) and $2,501-$5,000/month (11.3% or responders).

Project Based Fees

An informal survey done by SEOmoz found that project-pricing is very popular in the digital marketing industry, and prices per project tend to range from $1,000-$7,500. This the price for a one-time project. Follow-up work requires an additional engagement and thus more work and cost for you.

Full Time Employees

Companies often believe that full time employees are the most cost efficient way of getting the digital marketing they require. This typically results in one person being hired to fulfill all of the responsibilities. This single person bring a single set of experiences and technical experiences, so they will be limited in the abilities to contribute. They also represent a single point of failure – if they get hit by a bus or win the lottery then you’ll have no backup.

You will pay the employee for every hour of the day plus benefits such as health care and paid time off. Employee salaries range from $35,000.00/year to > $100,000.00/year depending on their experience. Like all employees, they’ll want 2-4 weeks of paid vacation and benefits such as sick leave, health care, dental care, etc. Those extra costs typically boost the cost by 15% or more, not to mention the cost of a computer, IT support, cell phone, etc.

Which is model is best?

It is important to understand that regardless of the cost there should always a return on investment (ROI). Today it is much easier for marketers to measure the impact of campaigns, so it should be relatively easy for a digital marketing agency to provide metrics to ensure that you’ve made a valuable investment.

Your ROI is what you should focus on while keeping your costs to their minimum.